Starting your own business is risky, so most shy away from the experience. Roughly 20% of businesses fail in the first year alone. By year 10, that number goes up to 70%. Dedicating a year — or decade — of your life to something that might leave you worse off than a low-paying job and no income security is a daunting reality.
But it’s one that millions of Americans pursue every year in hopes of achieving the American dream. Starting your own business allows for unlimited earnings potential and flexible working hours, and you can be your own boss. Like any high-risk investment, there are lots of upsides if you do it right.
Cuban is a big proponent of this value proposition —”You only have to be right once,” he said — meaning a successful business can quickly change your life trajectory for the better. Finding a strong, scalable business and seeing success could quickly scale to millions in revenue, and you will reap the rewards and all of the upside associated with a business. A $5 million exit for the majority of Americans is life-changing.
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While many love the idea of starting their own business, few take the leap. If you have a family, they take on the risk as well, and it’s much harder to lose everything when there are others involved. And even if a business doesn’t fail, it could take years to build enough profit to replace a day job salary.
With many wanting to start their own business, it leaves people wondering what the best time to start a business is. Cuban said, “If you’ve got nothing, that’s the perfect time to start a business,” in a recent episode of the Lex Fridman Podcast. If you have a great life and a well-paying job, you could lose all of that by starting a business. But if you have nothing, then much of the risk of starting a business and the opportunity cost of starting a business goes away.
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Cubans started MicroSolutions in the 90s for $500, sacrificing by sleeping on the floor of an apartment he shared with six other guys. He got the money from his first customer, who paid upfront. He later sold MicroSolutions for $6 million and rolled that money forward to start Broadcast.com, which he sold to Yahoo for $5.7 billion.
Fridman and Cuban talked at length about entrepreneurship and starting a business. While there are risks and rewards involved, starting a business isn’t even half the battle. “It really comes down to preparation,” Cuban said.
Starting a business takes money. Depending on the business, it might not be too high. For many trades, it’s a handful of tools and a work vehicle. Many online businesses can be started with a few hundred dollars using pre-built sites like Wix or Squarespace. While it might be hard to save up a few hundred to get your business off the ground, Cuban says, “If it’s important enough to you, you’ll save the money, you’ll give up, you know, whatever it is you need to give up to put the money aside.”
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This article Mark Cuban Getting Fired And Sleeping On The Floor Helped Make Him A Billionaire: “If You’ve Got Nothing, That’s The Perfect Time To Start A Business” originally appeared on Benzinga.com
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